Below Grade Is Being Used As GLA

[Thomas Fiehler]

Richard-I asked the same question a few months ago to Lary Disney at the Ky, appraisal board. All comps reported the lower level as the GLA so in order to conform to State law which quotes ANSI as the correct way to measure a house do I report the subject the same way and overlook the State law or guess at the GLA of the comps. Correct answer was to guess at the GLA of the comps because the law cannot be ignored. So...does the State recognize the ANSI standards as the correct way to measure a house? That should make all the difference in the world.

 

[Carnivore]

Thomas,

What harm is there to segregating the Basement from the GLA in the SCA?

 

[Richard Carlsen]

It is irrelevant if the per unit value of the basement improvement is less then, equal to or more than the GLA per unit value of the improvement.

We are dealing with contributory value as generated by the market; not the cost approach. If the market says that it is living space, it is living space as far as I am concerned. I do not normally consider it so in deference to the Supplemental Standards but if those standards were not there and all below grade living space that was finished comparable to above grade levels and considered as GLA in appraisals, it is my guess that opinions of value would not change one bit. The market buys what the market perceives as a houses utility; not what is written in ANSI or FNMA guidelines.

All comps reported the lower level as the GLA so in order to conform to State law which quotes ANSI as the correct way to measure a house do I report the subject the same way and overlook the State law or guess at the GLA of the comps.

I'm not sure what you are driving at. State law applying to what? MLS? Appraisal reports? What?

 

[Richard Carlsen]

What harm is there to segregating the Basement from the GLA in the SCA?

SCA? A term I am not familiar with.

Look, please go back to my original post which states that I use the below grade finished area in two specific cases. I am not arguing that the below grade area should be included in the GLA. I am saying for me, there are two specific times when use of the finished below grade area is fully justified by either a design necessity or by an overwhelming necessity dictated by the market. In 15 years of doing it this way, and having to use it maybe 2 to 3 times a year, I have only two times that I can remember had it questioned by an UW. Once I spoke to them and further explained my rationale, they accepted it.

 

[Carnivore]

We are dealing with contributory value as generated by the market; not the cost approach.

I never said a word about the cost approach.

Units of comparison:

units: one fireplace, two fireplaces
more units: one stall garage, two stall garage, three etc
GLA 1 sft = 1 unit
basement 1 sft = 1 unit
1 full bath, 1.5 full baths
etc

If the market says that it is living space, it is living space as far as I am concerned.

OK, I believe you. I do the same thing. I treat it as basement finished living space. Whats your point?

 

[joebuck]

The Assessor Also Supportsd My Sf Of The Home And One Of The Comps An Appraiser States As 2100 Sf Is Actually 1200sf This Appraisal Was Under Review By Me And I Have Run Into An Appraiser Who Has Other Things On His Mind Then Appraising. He Stated That His Apprentice Appraiser Was Correct. By Putting Basement As GLA.

 

[frozone]

The Assessor Also Supportsd My Sf Of The Home

Uh oh.... someone is cruising for a bruising.m2:

 

[Greg Bell]

Yikes , you never know how the local customs treat below ground finished area.If you include below ground GLA you may bet a call from a hot shot reviewer that wants a better explanation..

 

[Richard Carlsen]

Units of comparison:

units: one fireplace, two fireplaces
more units: one stall garage, two stall garage, three etc
GLA 1 sft = 1 unit
basement 1 sft = 1 unit
1 full bath, 1.5 full baths
etc

I'm sorry. Judy called me for dinner and I just skimmed the post. My fault.

However, unit of comparison are based on the utility as defined by the market.

If a 1 story house with a full walkout basement has 2 bedrooms on the above grade level and two bedrooms, full bath and rec room down with similar finish located in the full, walkout basement, I am not going to make any utility adjustment for bedroom count on a similar 1 story comp with 4 bedrooms, all on the the above grade level. The reason is, in my market, the two bedrooms down, even though below grade, are seen as being part of the living area with full utility. I will not include the lower level in the GLA but I cannot demonstrate that the market penalizes the subject for having the two bedrooms in the below grade level.

As I said, read my original post. I only include the below grade area in the GLA in two specific instances. The rest of the time, it is counted in the basement level with appropriate finish adjustment.

 

[frozone]

FNMAE Section 404.06 - Gross Living Area

The most common comparison for single-family properties (including units in PUD, condominium, or cooperative projects) is above-grade gross living area. The appraiser must be consistent when he or she calculates and reports the finished above-grade room count and the square feet of gross living area that is above-grade. For units in condominium or cooperative projects, the appraiser should use interior perimeter unit dimensions to calculate the gross living area. In all other instances, the appraiser should use the exterior building dimensions per floor to calculate the above-grade gross living area of a property. Only finished above-grade areas should be used-- garages and basements (including those that are partially above-grade) should not be included. We consider a level to be below-grade if any portion of it is below-grade--regardless of the quality of its "finish" or the window area of any room. Therefore, a walk-out basement with finished rooms would not be included in the above-grade room count.

Rooms that are not included in the above-grade room count may add substantially to the value of a property--particularly when the quality of the "finish" is high. For that reason, the appraiser should report the basement or other partially below-grade areas separately and make appropriate adjustments for them on the "basement and finished areas below-grade" line in the "sales comparison analysis" grid. To assure consistency in the sales comparison analysis, the appraiser generally should compare above-grade areas to above-grade areas and below- grade areas to below-grade areas. The appraiser may deviate from this approach if the style of the subject property or of any of the comparables does not lend itself to such comparisons. However, in such instances, he or she must explain the reason for the deviation and clearly describe the comparisons that were made.

Section 404.07 - Gross Building Area

Gross building area, which is the total finished area (including any interior common areas, such as stairways and hallways) of the improvements based on exterior measurements, is the most common comparison for two- to four-family properties. The gross building area must be consistently developed for the subject property and all comparables that the appraiser uses. It should include all finished above- and below-grade living areas, counting all interior common areas (such as stairways, hallways, storage rooms, etc.) but not counting exterior common areas (such as open stairways).

We will accept the use of other comparisons for two- to four-family properties (such as the total above-grade and below-grade areas as discussed above in Section 404.06), as long as the appraiser explains the reasons he or she did not use a gross building area comparison and clearly describes the comparisons that were made.


If they were that adamant about it they would replace should with must.